The Telangana High Court ruled that Section 47 of the CPC cannot be invoked to challenge an arbitral award without first exhausting the remedy of an appeal under Section 37 of the Arbitration and Conciliation Act.
The Court dismissed a Civil Revision Petition challenging the Commercial Court’s rejection of a Section 47 CPC application aimed at dismissing an Execution Petition. It also imposed ₹5 lakh in costs on the Petitioners.
The Award-holder (Respondent) filed an Execution Petition to enforce the arbitral award. Despite having a pending appeal under Section 37 of the Arbitration and Conciliation Act, 1996, and the dismissal of their efforts to recall a conditional stay, the Judgment-debtors (Petitioners) filed a Section 47 CPC application within the ongoing Execution Petition.
The Division Bench of Justice Moushumi Bhattacharya and Justice BR Madhusudhan Rao observed, “We hence do not find any reason to interfere with the findings of the Commercial Court. We also agree with the views expressed by the Commercial Court that the petitioners have not given any justification under the law for pursuing an alternative route for challenging the legality of the Award, without exhausting their rights under the pending Appeal under section 37 of the 1996 Act.”
The Court held, “We find the conduct of the petitioners not only to be in blatant disregard of the law but also evincing desperation to avoid the processes of law by pushing back their obligation to make payment to the Award-holder by filing one vexatious proceeding after another. The petitioners’ selective reliance on the CPC for mounting a challenge to the Award under section 47 of the CPC is contrary to law. In fact, the petitioners have no explanation for suddenly switching from the main line to a chord line for reaching the same distinction i.e., for nullifying the Award.”
The Telangana High Court held that objections under Section 47 CPC differ from those under Section 36 of the Arbitration and Conciliation Act, as court judgments and arbitral awards originate from distinct processes. It dismissed C.R.P. No. 787 of 2025 as not maintainable and imposed ₹5 lakh in costs on the Petitioners, noting that the Award-holder had been unjustly delayed from enforcing the award since 2019 due to prolonged and misconceived litigation.
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